Next budget targets 5.1% GDP growth

The federal government has set key priorities for the 2026-27 federal budget, aiming for a GDP growth target of 5.1% and keeping inflation under 6.5%, while highlighting green development, climate action, and enhanced disaster management as central themes.

The Finance Ministry has formally approved the budget-making schedule for the next financial year, with the interim macroeconomic framework expected to be prepared within the current month, according to an official circular.

The Mid-Year Review report will be presented in the National Assembly in February. All the ministries have been instructed to submit key budget forms, revised revenue and expenditure estimates, and detailed development project plans by February 20.

According to the ministry, inflation is expected to remain contained at 6.5% in the upcoming budget. Special emphasis will be placed on green taxes, non-tax revenue, and climate-related subsidies.

The ministries have also been directed to identify environmental and climate-related expenditures, while separate tagging of climate change-related revenues and expenditures has been made mandatory.

A strengthened disaster budgeting framework is also being planned to mitigate the impact of natural calamities, with separate monitoring of disaster-related expenditures. The government intends to divide natural resource categories and subsidies into climate action measures.

Accordingly agricultural insurance and climate-resilient infrastructure adaptation will fall under the "climate adaptation", while clean energy initiatives and electric vehicles will be included in "climate mitigation" subsidies.

The ministry has stressed that non-tax revenues will be evaluated based on environmental impact. Levies on pollution-causing activities will be linked to climate targets, while energy, transport, and pollution management will receive priority under the green revenue agenda.

The budget calendar has also been outlined in detail. As such, meetings of the Budget Review Committee are scheduled from March 30 to April 12, while information on the exchange rate will be shared on April 15.

Approval of the Budget Strategy Paper is expected by April 20, followed by the issuance of budget ceilings for current and development expenditures between April 21 and 25. Meetings of the Annual Plan Coordination Committee will take place in the first week of May.

This will be followed by a session of the National Economic Council in the second week of May. All budget documents are expected to be completed by the end of May, with quarterly estimates submitted by June 30.